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How is the Instagram Ad Cost per Click Determined?

Determining Your Instagram Ad Cost Per Click & Is It Worth It?

71% of U.S. businesses are now on Instagram. 65% of the top performing posts center around a brand. 80% of users follow businesses. With more than 800 million users on the platform today, getting your posts notified and engaging your targeted audiences are the key to success.

How the algorithm decides your Instagram ad cost per click is that whenever you choose to use Instagram ads, you are taking part in one of the fastest auctions ever happening behind the scenes. The bidding system compares all of the bids for that ad space and gives the ad space to the highest bidder.  When you set up your ads, you will choose where you want the ads to appear whether its on Facebook, Facebook’s Audience Network, or Instagram. The bid amount not only determines if you get a spot but also determines your ad placement.

In terms of bidding, you don’t have to outbid all of the other advertisers financially to win, three main factors go into your ad cost per click which are relevance, estimated action rate, and your actual bid. The first one is relevance, which measures how relevant your ad appears to the people who are seeing it. More relevant ads enhance the Instagram user experience and earns more quality clicks for you and more paid clicks for Instagram. Instagram rewards you by adding your relevance score to your monetary bid. The second factor is an estimated action rate, the attention that Instagram estimates that your ad should be getting. by underperforming your estimates, your relevance goes down and vice versa. On average, you pay $0.4-$3 per click on Instagram which has a higher CTR than Facebook. Instagram ads also have 58x the interaction rate of Facebook, therefore the Instagram advertising is worth it.

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